Washington, DC – The Federal Housing Finance Agency (FHFA), as
conservator of Fannie Mae and Freddie Mac, today announced it has
reached a settlement with J.P. Morgan Chase & Co. and related
companies for $ 4 billion to address claims of alleged violations
of federal and state securities laws in connection with
private-label, residential mortgage-backed securities (PLS)
purchased by Fannie Mae and Freddie Mac. Under the terms of the
agreement, J.P. Morgan Chase & Co. will pay approximately
$2.74 billion to Freddie Mac and $1.26 billion to Fannie Mae to
resolve certain claims related to securities sold to the
companies between 2005 and 2007 by J.P. Morgan Chase & Co.,
Bear Stearns & Co., Inc. and Washington Mutual.

In separate settlements, J.P. Morgan Chase & Co. resolved
representation and warranty claims with Fannie Mae and Freddie
Mac related to single-family mortgage purchases by the two
companies. Under the terms of the agreements, J.P. Morgan Chase
Bank N.A. will pay a total of approximately $1.1 billion -- $670
million to Fannie Mae and $480 million to Freddie Mac.

“The satisfactory resolution of the private-label securities
litigation with J.P. Morgan Chase & Co. provides greater
certainty in the marketplace and is in line with our
responsibility for preserving and conserving Fannie Mae’s and
Freddie Mac’s assets on behalf of taxpayers. This is a
significant step as the government and J. P. Morgan Chase move to
address outstanding mortgage-related issues,” said FHFA Acting
Director Edward J. DeMarco. “Further, I am pleased that a
resolution of single family, whole loan representation and
warranty claims could be achieved at the same time. This, too,
will have a beneficial impact for taxpayers and the housing
finance market.”

FHFA’s General Counsel noted, “Our lead representation by
Philippe Selendy and the firm of Quinn Emanuel Urquhart &
Sullivan was central to reaching this landmark settlement and
their work continues in the remaining PLS cases. I want to cite
the strong work of the FHFA Office of General Counsel’s
litigation group under Stephen Hart and the legal and business
teams at Freddie Mac and Fannie Mae.

“The settlement of the PLS litigation was initiated by U.S.
District Court Judge Denise Cote’s direction to undertake
mediation of the PLS cases under her jurisdiction. The settlement
also is aligned with the working group of federal and state
authorities addressing claims related to private-label securities
and FHFA has and continues to work with all the government
entities involved.”

FHFA has now settled four of the 18 PLS suits it filed in 2011,
and remains committed to satisfactory resolution of the pending
actions.